NewStar supports the recapitalization for Generation Partners

Boston, MA– September 21, 2007 – NewStar Financial, Inc. (NASDAQ: NEWS), a Boston-based specialty finance company, announces that it is the Lead Arranger on a new $45.0 million financing to support the recapitialization of Virtual Radiologic Corporation (“VRC”). VRC is owned by Management and Generation Partners (“Generation”). Founded in 1996, Generation is a private investment firm with $325 million of capital currently under management. Generation provides equity capital to growth companies through buyout and growth equity investments and, specializes in  backing and building service companies which are using technology to lead change in their respective industries.

NewStar served as the Lead Arranger for the $45 million credit facilities, comprised of a revolving credit facility and a term loan. Dr. Sean Casey, Chief Executive Officer of VRC said, “We are pleased to  have a supportive lending partner involved in this transaction. NewStar was a true value-added partner throughout the process and very helpful in structuring the debt deal.”

Virtual Radiology Corporation is the leading U.S. –based provider of remote diagnostic image interpretation, or teleradiology, services. VRC’s experienced radiologists are certified by the American Board of Radiology and licensed in 50 states to read all modalities, including CT, MRI, ultrasound, nuclear medicine, PET and X-ray. JCAHO accredited, VRC provides radiology practices,  hospitals and imaging facilities with quality services that maximize the benefits of technology to support optimum patient care. Founded in 2001, the company is headquartered in Minneapolis, Minnesota.

“This transaction allowed NewStar to put our  understanding of a unique and growing segment of the healthcare marketplace to work for the benefit of our client,” said Greg Pachus, Managing Director and Head of NewStar’s Healthcare Team. “VRC has established itself as a top-tier firm in the teleradiology world. Their innovation and cutting edge technology has put them at the forefront of the industry.

NewStar’s deal team included Greg Pachus, Mark du Four, Walter Marullo, Keith Cox, Dipen Patel and Douglas Lancrey.

About NewStar Financial, Inc.:

NewStar Financial is specialized commercial finance company focused principally on meeting the complex financing needs of customers in the middle market through their corporate, commercial real estate, and structured products groups. Their senior banking teams call directly on customers to provide advice and finance a range of strategic transactions that may require some combination of senior secured, second lien and mezzanine financing. NewStar typically works with customers with financing needs of  up to $150 million and cash flow as low as $5 million. They target ‘hold’ positions of up to $35 million, but may also underwrite or arrange transactions up to $100 million for syndications to other lenders.

We are headquartered in Boston MA, with regional offices in Darien CT, Chicago IL, San Francisco CA, San Diego CA, and Charleston SC. In December of 2006, NewStar completed an Initial Public Offering. The company’s shares trade on the MASDAQ under the ticker symbol, NEWS. Please visit their website at www.newstarfin.com for more detailed transaction and contact information.